Axcelis Technologies Inc (ACLS) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Axcelis Technologies second-quarter 2016 conference call. My name is Brian and I will be your coordinator for today. (Operator Instructions)

I would like to turn the presentation over to your host for today's call, Mary Puma, President and CEO of Axcelis Technologies. Please proceed, ma'am.

Thank you, Brian.

With me today is Kevin Brewer, Executive Vice President and CFO, and Doug Lawson, Executive Vice President of Corporate Marketing and Strategy.

If you have not seen a copy of our press release issued earlier today, it is available on our website. Playback service will also be available on our website, as described in our press release.

Please note that comments made today about our expectations for future revenues, profits, and other results are forward-looking statements under the SEC's Safe Harbor provision. These forward-looking statements are based on Management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K Annual Report and other SEC filings, which we urge you to review.

Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements.

Today Axcelis reported second-quarter financial results with revenues of $64.5 million, gross margins of 39%, and earnings per share of $0.10.

As expected, our systems business returned to a more balanced mix between memory and foundry logic. The second-quarter split was 37% memory and 63% foundry logic. We believe our systems business will have a bias toward foundry logic in the third quarter as well, but will see increasing strength in memory activity beginning in the fourth quarter. We expect to end the year with systems revenues more evenly split between the two segments, similar to 2015.

From a product perspective, Q2 saw a higher mix of high energy implant. In Q3 we expect a broader Purion product mix that will include the beginning of a significant uptick in medium current business. This increased activity is being driven by the technical differentiation of the Purion M, especially in the image center RF and power device markets. We expect Purion M revenues to be one of the key drivers of our market share increase in 2016.

In terms of guidance we continue to expect second-half revenues to be stronger than the first half, with momentum in the memory market increasing in Q4 and into 2017. For the third quarter we are forecasting revenues of $65 million to $70 million, gross margins in the mid-30% range, operating income of $2.5 million to $3.5 million, and an EPS of $0.03 to $0.06.

Q3 gross margin guidance is impacted by the shipment of Purion Ms to new customers. This includes some Purion M systems built with higher-cost inventory purchased prior to the volume ramp of the Purion platform, as well as systems with higher costs associated with the introduction of the first silicon carbide tool. It is also impacted by the expected closure of an outstanding Purion H evaluation.

Revenues are lower than we had originally expected them to be at this point in the year. This has been driven by delays in customer spending at a few key accounts focused on memory. However, we continue to do a good job on executing against our primary objective of setting the table for 2017 with new Purion penetrations.

A key element of this objective is the extension of our base Purion product family to address the specific needs of customers producing not only memory devices, but also image centers and power devices. These extensions include the new Purion EXE and VXE, providing the highest energy levels available in a production implanter; the high-temperature Purion M, with 150 millimeter silicon carbide capability for the power device market; and significant productivity and source life enhancement for the Purion H.

In terms of the customer penetrations in the first half of this year, we have added new customers both in memory and in foundry logic across all three types of Purion products. Our new penetrations are coming from expanding our customer base through new sales and evaluation placements, increasing the qualified recipes at existing customer sites, and securing capacity production buys as evaluations close. Interest continues to be very high in the Purion H due to the advantages the spot beam architecture provides for our customers' most challenging implant steps.

In Q2 we successfully added one new Purion H customer and shipped the first follow-on Purion H production systems to a second DRAM manufacturer. We also extended an existing memory evaluation to give the customer's engineers more time to explore the capabilities of the system.

We shipped Purion XE to one new customer and two new fabs in both memory and foundry logic, including the first shipment of the Purion EXE in this quarter. The Purion EXE provides customers with a much higher energy capability in the same footprint as the Purion XE. Customers with the Purion XE can field upgrade to the EXE, giving them more flexibility in their buying decisions.

We are also seeing significant interest in the new Purion VXD, which provides the highest levels available in a production implanter on the market today.

We are seeing increased levels of interest from both the memory segment and the mature process technology segment for the standard Purion M at 200- and 300-millimeter wafer sizes. Low levels of metal contamination due to the hybrid filter design and better productivity at higher energy levels are driving this activity.

Additionally, with the introduction of the high-temperature Purion M with 150-millimeter silicon carbide capability we are now seeing a ramp in shipment of these tools. We have also recently placed a standard 300-millimeter Purion M evaluation unit in the second fab of a leading Asian (technical difficulty) memory manufacturer, to accelerate DRAM recipe qualification.

Expanding our customer base keeps us on track to increase our market share to between 20% and 25% of the $825 million to $875 million implant market in 2016. This achievement positions us to take full advantage of multiple large projects anticipated in 2017 and 2018.

Customer fab projects over the next couple of years are expected to support the continued growth of the Internet of Things and a large sustained memory build. New fab construction accounts for a significant portion of the implant TAM in a given year. A 100,000 wafer-start fab requires between $150 million and $200 million of implant capacity.

By splitting their business evenly between two strong implant suppliers, our customers have seen the innovation benefit as measured by productivity, yield, and cost of ownership. As a result, Axcelis will see a step-function increase in market share, with just 30% to 50% participation in two to three of these new fabs. Adding this incremental revenue to our existing customer base will allow us to achieve our 40% market share goal.

Now I'd like to turn it over to Kevin to discuss our gross margin improvement progress and our second-quarter financial results. Kevin?

Thank you, Mary.

Before reviewing the second-quarter financials, I'd like to take a minute to go over our gross margin objectives and results.

We continue to focus on gross margin improvement and understand its importance to driving higher earnings per share. Our long-term financial model of 40% market share and 40% gross margin will generate significant earnings per share.

In Q2, gross margin improved to 39%, fueled by continuing cost-out efforts and a favorable mix of mature Purion high energy systems. Across the Purion product family we are driving quarter-over-quarter improvements in the cost of goods sold through value engineering projects, supply chain optimization, and lower manufacturing, install, and warranty costs. As Purion H and Purion M products mature and additional cost-out initiatives are realized, we expect margins on these products to more closely align with our mature high energy tools.

We have previously noted that the mix of accretive GSS revenue versus systems revenue and the mix within systems can impact gross margin performance quarter to quarter. Evaluation units and first-time builds like the new Purion EXE, VXE, and Purion M for silicon carbide, can also pressure margins.

But the key takeaway is that even though margins may vary from quarter to quarter, we are making steady progress lowering our cost of goods sold, which in turn is driving margin improvement. Since ramping production of the full Purion product line with the Purion H in Q1 of 2015, system [standard] margins has improved 640 basis points on a rolling-four-quarter basis.

New product line extensions such as the Purion EXE, VXE, and Purion M for power devices enable tiered pricing strategies. Combined with ongoing cost-out initiatives and planned volume increases, this should drive our gross margins to 40% exiting 2017.

Looking at our second-quarter results, Q2 revenue was $64.5 million compared to $67.5 million in Q1. Q2 system sales were $33.7 million compared to $37 million in Q1. Q2 GSS revenue finished at $30.8 million compared to $30.5 million in Q1.

Q2 sales to our top 10 customers accounted for 73.8% of our total sales compared to 79.6% in Q1, with three of these customers at 10% or above.

Q2 system bookings were $41 million compared to $36.9 million in Q1. We had a Q2 book-to-bill ratio of 1.13 versus 0.98 in Q1. Backlog in the second quarter finished at $28.9 million compared to $21.9 million in Q1.

Q2 combined SG&A and R&D spending was $20.5 million compared to $20.6 million in Q1. SG&A in the quarter was $12 million with R&D at $8.5 million. In Q3 we expect SG&A and R&D spending to be approximately $21.5 million, primarily driven by higher evaluation costs required to support expansion of our Purion footprint.

Gross margin in Q2 finished at 39% compared to 34.7% in Q1. In Q3 we expect overall gross margin in the mid-30% range.

Gross margin guidance is impacted by the shipment of Purion Ms to new customers. This includes some Purion M systems built with higher-cost inventory purchased prior to the volume ramp of the Purion platform, as well as systems with higher costs associated with the introduction of the first silicon carbide tools. This also impacted by the expected closure of an outstanding Purion H evaluation. Without the impact of these tools, we would be more in line with our 2016 year-end target of 36% to 38% gross margins.

Operating profit in Q2 was $4.6 million compared to $2.5 million in Q1.

Q2 net income was $2.9 million, or $0.10, above guidance and consensus. This compared to $1.9 million, or $0.06 per share, in Q1.

Q2 inventory ended at $110.6 million compared to $108.7 million in Q1. Q2 accounts payable were $26.8 million compared to $21.7 million in Q1.

Q2 receivables were $63.5 million compared to $47.5 million in Q1. Late-in-the-quarter shipments impacted the timing of receipts.

Q2 total cash finished at $67.8 million compared to a cash balance of $74.4 million in Q1. Lower cash was also driven by late-in-the-quarter shipments. We expect Q3 cash to be approximately $70 million.

Overall, I am very pleased with our financial performance in the second quarter. Tight expense control and improving system margin contributed to our seventh consecutive quarter of profitability. And our balance sheet continues to be strong and free of debt.

Now I'd like to turn the call back to Mary for her closing comments.

Thank you, Kevin.

It is clear that Axcelis is capturing customer mindshare with the Purion product family. New product extensions are helping drive additional share gains and higher margins. The industry is gearing up for a strong build cycle and we expect our Purion penetration success to continue throughout 2016, positioning us for a stronger 2017 and 2018. Share gains in these years will be driven by our broader customer base and improved memory and IoT spending.

We continue to execute well and believe that we are on track to achieve our long-term business model of 40%-plus market share and gross margins.

With that, I'd like to open it up for questions.

Thank you. (Operator Instructions) Edwin Mok; Needham & Company.

So first question, just to clarify your comment there, Mary, you mentioned that one of the evals that you guys have was extended. And then I think you also said that you added a second, an additional, Purion H customer. I just want to clarify. So what happened in the first eval? Did you [ship extra tool] to that customer? And then in terms of this new Purion H customer, is that -- what kind of customer is that? Is that memory or foundry logic?

Let's clarify. We have three evaluation units out in the field right now. We have a Purion H that we shipped to a foundry logic customer in Asia. We have a Purion H eval which has been extended beyond where we thought it would extend. But that's actually quite a positive thing. As we've talked in the past, extending an evaluation unit actually gives us more time to work with the customer and allows that customer to explore the capabilities of the tools further than perhaps he would have under other circumstances had we closed the evaluation unit.

And then I also mentioned that we have a Purion M evaluation unit out there, which we put into a fab where the customer has several Purion Ms already that are qualified for flash. We've not put this Purion M evaluation unit in to accelerate qualification for DRAM in preparation for a build that this customer is planning to do probably likely late this year, early next year.

So those are the three evaluation units, Edwin. Did that answer your question?

Okay, that's helpful. Actually, that's helpful to clarify that. So it's not two projects going at the same time.

Regarding Purion M, I think you mentioned in prepared remarks that you guys have seen good interest in that. (Inaudible) so you talked about this increased mix of Purion M in the current quarter. Can you help us kind of think about how that could potentially impact mix, [meaning] Purion M versus Purion XE or Purion H.? Not in the near term because all the (inaudible) that you guys are shipping but (inaudible) normalized run rate or (inaudible) customer. Is there a difference in margin mix as mix shifts from one type to the other?

Edwin, Kevin's going to take that on because it's gross margin related, but you're not coming in very well. So if there's any way you can maybe -- if you can ask a follow-on you could change phones or something?

(Inaudible)

Yes. Go ahead.

So I think there's two parts to the question, Edwin. I think you were asking about the mix of Purion Ms going forward, and then secondly how that impacts gross margin.

So in terms of the first part of the question, the Purion M is beginning to ramp, as Mary described. We've begun to see an uptick. This was driven by a couple of factors.

One, in our more mature technology segment, while we're seeing a lot of interest from image sensors due to the hybrid filtering system that gives us lower metals contamination, we're also seeing interest in several applications that require the higher energy levels that the Purion M is capable of. And then, third, we're seeing a lot of interest in the silicon carbide variant of the tool for power devices.

And so that is all beginning to go now. And then, as Mary just described, we've got another Purion M in a more standard application in a DRAM fab for evaluation.

So there's been quite a bit of activity on the M. So I would say going forward we would hope we continue to see activity with that. It really balances out the product line to give us the ability to have all three of the products in any of these customers. Image sensors have a high demand for high energy. And medium current, the power devices, could have opportunity for medium current as well as high energy. And then obviously in the DRAM and memory segments there's a need for all three.

So we see it as a part of the, what we have said in the past have referred to as the power of Purion. Once the customer gets the platform in, then they're able to migrate to the additional product lines within that. And then additionally, with the extensions that we're making to each of the product families, it gives them more opportunity and us more opportunity to target some of those segments. And now Kevin will answer (multiple speakers) --

(Inaudible)

Can now, yes.

(Inaudible) the phone problems.

Let me --

(Inaudible) more question just in terms of con -- looking beyond this quarter it sounds like you guys are more confident about growth in the fourth quarter. Can you kind of help me understand, is that predicated of the three evals you guys talked about turning into -- completing those evals and turning those customers into -- and/or turning those customers into buying volume for production? Or is it something that you've started to hear from customers in terms of their plans to ramp up DRAM investment where actually that's closer (inaudible) mix nanometer than 20 nanometer? Can you give us some color on that?

Yes. I think it's probably a combination of both of the things that you just mentioned. As I mentioned a few minutes ago, we actually believe that memory spending is going to begin to increase in Q4 and into 2017. And obviously that plays to a strength that we have. It's really focused around several of the projects that I think not only has Axcelis been talking about but our peers have been talking about as well.

So we are confident, again, that the second half -- our second-half revenues will be better than the first half. And it will continue to be a mix of the mature process technology customers plus memory.

Okay, great. Sorry, one last follow-up. It's a quick one for Kevin. So Kevin, just based on my numbers looks like your backlog actually grew at bit this quarter. And based on kind of your comment would imagine that you guys are expecting stronger bookings in the coming quarter? Is that how we should think about how ramp-up in 4-Q and (multiple speakers) --

Yes. I mean, yes, you're right. The backlog did go up this quarter. We've always said that bookings and backlog -- a lot of times we'll actually book and sell a system the same quarter. But obviously backlog and bookings going up is never a bad thing. So I guess it would be a way to take a look at what we're thinking for the future quarters.

Okay. Did you guys start to already book some of the stuff for the fourth quarter in the first month of this quarter?

No, there's not a lot booked right now for the fourth quarter.

No.

Again, a lot of this is book and ship.

Yes. (Inaudible)

Okay. That's all I have. Thanks for all your time.

Patrick Ho; Stifel Nicolaus.

Maybe just addressing a combination of the pickup in memory spending that you're projecting later this year and into 2017, along with the gross margin outlook you have. Obviously higher utilization, factory absorption helps gross margins. But what, I guess, steps are you taking to assure that you do get that benefit from a cost-of-goods perspective? How are you managing the product chain and the costs around this potential build without I guess incurring any, I guess, expedited costs, things of that nature, that would actually weigh against gross margins down the line?

Yes. So, Patrick, in terms of what we're doing for managing the costs, unlike when we initially ramped Purion a couple of years ago when we were hit with quite a few expediting charges on Purion H, right now we have the supply chain primed pretty good. It's got surge capacity for us when we need it. So I think the best thing that's going to happen actually is the fact we're getting more volume in there is going to help us on some of our cost-out curves.

You know, the margin improvement really is coming from a lot of things. We're not just relying on material cost out from volume. We've done a lot of supplier rationalization in terms of moving to different suppliers where we can get as good or if not better quality with lower costs. There's still a tremendous amount of work going on with the engineering group doing value engineering in terms of driving cost out of the tools.

And then in the factory we have, and always have had, a very strong lean program. And we've made tremendous strides on labor (inaudible) reduction which we're going to continue. So I'm not worried that a significant ramp is going to negatively impact us in terms of expediting costs and things.

And then there's one further point, Patrick, as well on -- I think you know where our magnets come from. We've actually got some local inventories [stood] up now and we're building to more of kanban type system. So that's an area where we had a lot of expediting prior, and we should be able to stay away from those significant fees this time around.

Great. That's helpful. And my second question in terms of your foundry logic business, which has been centered on the trailing edge, image sensors are still projected over the next couple of years to grow. How do you see that marketplace, particularly as you enter 2017, and maybe not on a quantitative basis, but qualitatively how do you see that market and some of the opportunities to get additional volume buys on the foundry side of things?

Yes, on the material foundry logic image sensors, power devices, RF devices, all of those are actually pretty hot right now. And so we see quite a bit of opportunity, from IDMs that are producing them, companies that are running a fab-lite operation, and then the foundries that are supporting them. So there's quite a bit of opportunity across that whole market. And it's opportunity for all three of our product.

And as you can see from the product extensions, Patrick, we've targeted, some of those markets specifically would -- the silicon carbide for power and the VXE and EXE are targeted very much at the image sensor market.

Great. Thank you very much.

(Operator Instructions) Craig Ellis; B. Riley.

I apologize if this was covered in the prepared remarks; I jumped on a little late. Very strong gross margins in the quarter, Kevin. Was that a clean number? Or were there some one-time items that wouldn't recur in the back half of the year that benefited margins for the second quarter?

Yes. So within Q2 there's two things. It certainly serves as kind of a proof point that we can get to the 40%. It was a very good quarter in that we didn't have any negative impact of eval costs coming through. We had a very strong mix of our mature high energy products. But the point I'll make is that as the Purion M and Purion H continue to mature, which they are, the margins on those products become more in line with that high energy as well.

So going forward, at some point the mix within a quarter of systems at least should have less impact on gross margins. But, you know, we're not coming off where we've been expecting to leave the year. We've been talking leaving the year at 36% to 38%. Again, we had a very strong quarter in Q2. But we also discussed in Q3 that we've got some -- a fair amount of Purion M inventory going out, some of it was bought prior to ramping production of Purion M so it was higher cost. And we've got some development costs, I would call them, that are sitting on the silicon carbide tools.

So Q3, that's why we're back down in the mid-30% range, because of a couple of events that -- I'll call them one-time because, again, as we move through some of this older inventory, as we build more silicon carbide tools, that negative impact will reverse.

And then, the other thing I've said, Craig, is that we still are on plan to exit 2017 at 40% gross margins. We've got very detailed roadmaps in place where we're driving a lot of cost out across the board, either through engineering, supply chain, warranty and install, all of the, I guess, usual suspects that we're really pushing hard.

And so we're feeling good with gross margins. But quarter to quarter they'll vary a little bit. And it's going to be driven by some of these, I guess, more one-off type events a little bit until Purion H and Purion M get up to the level of maturity of the high energy.

That's helpful. Thank you. The next question I'll just kick it over to Mary. Mary, we're at the mid-year point. The Company had the goal of 20% to 25% market share for the year. As you look at the business and the guidance for the third quarter, in your mind where are we shaking out at this point relative to 20% to 25%?

So I'm going to start by saying I think we've done a really good job this year expanding our customer base, which obviously leads and positions us to grow our market share. We have new customers who have just outright bought new Purion products. We've placed several new evals in the field. We've sold more Purion at existing customers. For example, we've just expanded the number of types of Purion tools that the customer (inaudible). So some customers who may have started out with the Purion XE are now also buying the Purion M and the Purion H.

We've increased the number of recipes that have been qualified on tools that are actually already in production at some of these sites. And then we've gotten follow-on capacity buys for production, again, at some other customers.

So I think in that regard we've done a really good job in terms of what we call setting the table for the market share increase in 2016, the 20% to 25% and then also getting up to 40%-plus in the 2017/2018 timeframe.

So at this point, again, we still expect revenues in the second half of the year to be stronger than the first half of the year. We are not coming off the forecast that we believe that our market share will be between 20% and 25% this year. And then moving forward continuing to increase, given the increase in memory spend and the IoT spending in 2017 and 2018 that will get us up to the 40%-plus.

Okay, and then last question. I'm not sure if it's better for you or better for Doug. But as you look at the activity that's occurring in memory, light year and some of the science that we're seeing, sounds like from Axcelis and a few other companies. Is that something that in your mind would keep the overall TAM at what is likely to be an $850-million-ish this year? Or is that the first sign of the TAM for ion implant really moving up towards $1 billion, which is where I think some of the consultancies have the market pegged?

Yes, so we definitely see with the memory builds that we've described and talked about 2017 and 2018 definitely moving back up into the $900 millions to close to $1 billion. The exact timing towards the end of the year and into the first of the year is still a little bit far away for us to figure out how much comes into this year and how much doesn't. And so we're still staying with the $825 million to $875 million, Greg, for our estimates. But we do see it moving up as those projects kick off.

Thanks, everyone.

David Duley; Steelhead.

Mary, I think you'd mentioned in your prepared remarks at this point of the year being some of the customers were behind where you thought they were. Could you just talk a little bit more color? I think you were referring to memory costs or something. But just maybe talk a little bit through that a little bit more for us.

Yes. It's mostly in the memory area. And, again, I think it's pretty consistent with what others have seen in terms of somewhat was anticipated spending in DRAM as some customers transitioned to a smaller node, there were some projects that potentially might have had some higher spending on the NAND side of the house.

So a few customers have slowed some things down, moved some things around. We're confident that that is just sort of a temporary pause, so to speak, on the memory side of things. And, as we said, we expect some of that spending to actually begin in Q4 of this year and certainly to have a much stronger 2017. I think we'll see those customers come back and spend significantly more in 2017 than they have in 2016.

Okay. And so, I guess in the fourth quarter you would expect kind of both of your major segments of business to be up, both your memory and your foundry logic business?

Yes. We expect our systems business to have a more even split between those two segments. So, yes.

Yes. Well, I just wanted to make sure, you know, even though you're saying it's going to be an even split I just wanted to make sure that both are going to be up sequentially, because sometimes the math works out where it's not that case. So just to be clear, both foundry and logic and memory spending should be up for you in the fourth quarter?

Well, I guess I'll put that in the context of we said our second-half revenues would be higher than our first-half revenues. And we're still talking about the 20% to 25% target for market share. So, Dave, you can do the math.

Okay. Kevin, I noticed that the deferred revenue balance was up $6 million. Is that reflective -- what was the reason for that?

Well, there's two tool sales that were driving that. I don't want to get into the specifics of it. But that will come back down in the current quarter, Q3 quarter. So there's just a couple of tool sales that got put in there. So that was -- I think it was up about $6 million. Is that what you said?

Yes.

Yes. It was two deals.

Okay. And final question from me, just to understand this, I guess you have three evaluation systems out in the field now. How many would you expect to close in the third calendar quarter?

At this point we would expect one to close in the third calendar quarter. And we're monitoring the others. It's possible one or more of those will close in 2016. And then we're also taking a look at potentially some new evaluation units. And that's something that we would put out in a press release.

Okay. Thank you very much.

Follow-up, Edwin Mok; Needham & Company.

Just two follow-up. One is any color in terms of your efforts in either Japan or your efforts to try and penetrate leading-edge foundry logic area?

Yes. So in Japan we've actually started up our own organization there and have started staffing with Axcelis employees. So it is an effort that's underway. We've talked about how that will take time to actually bear some fruit. But it is something that we are focused on.

And we are continuing to work with the leading edge guys to place an evaluation unit. I think you know, and we've said it before, that it is certainly very challenging. We've seen the environment change at a couple of those customers over the course of the year, which has made it perhaps even more challenging. But it is still a goal of ours for this year. And we're continuing to work at it.

Okay. That's helpful color. And then one question for you, Kevin. I think you mentioned the $21.5 million OpEx for this quarter, there's some ramp-up cost associated with that. Should we expect that OpEx to come down or to moderate [out of] this quarter or should we expect 4Q OpEx to be potentially -- can come back down a little bit?

So right now it is being driven by evals. So I know the -- going forward to Q4 how that's going to move will be dependent on what we have for evals. But it's not like it's a lot of headcount expense coming in. It's more associated with eval costs. Our eval budget is actually up this year, which isn't necessarily a bad thing, that it's up.

Great. Thanks for the color.

Mark Miller; Benchmark.

Just wondering if you could give us a feeling of -- people are starting to transition to -- well, I think SanDisk announced a 64-layer 3D NAND flash they'll be ramping the second half of the year. Are any of your tools either being used in the evaluation or the development of this next generation's 64-layer type, or larger, NAND flash?

So, Mark, as they move from 48 to 64, there's a lot of etch and dep equipment that's involved there, but there is not a lot of implant. Where the implant will come in is as they start to add wafer starts. Or there's opportunity potentially as customers get to those high-aspect ratios where there could be opportunity for some material modification implants. But that would be very dependent on the customer and the technology.

In terms of the material modification, high-aspect ratio, I assume you would have an advantage over your competition because of the [RaSer] spot.

That's correct. We would expect it would be uniformity of the Purion H spot being -- that that should give us an advantage.

Okay. Thank you.

Thank you. This concludes the Q&A portion of the call. I will now turn the call back over to Mary Puma, who will make a few closing remarks.

So I want to thank you all for your continued support.

We will be presenting at the 7th Annual Credit Suisse Small Mid Cap conference on September 14th in New York. And we will also be hosting an investor event on October 4th in New York City. We hope to see you all while we are on the road during the upcoming months.

Thank you.

This concludes the presentation. Thank you for your participation in today's conference. You may now disconnect. Good day.